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Well, that happened. Earlier this week, Instagram found itself in middle of an insta-controversy, and just like that it was insta-over.

The photo sharing app, which gives iPhone and Android users the ability to make their digital pix look like '70s-era Polaroids, became insanely popular in less than two years. Just as insanely, Facebook forked over $1 billion in stock to own it. (Thanks to Facebook's boat-anchor stock price, that deal is now worth just under $800 million.)

So this week Instagram published a revised set of terms and conditions that seemed to reveal exactly why Facebook paid so much for it. To most people who read them, it appeared Instagram had decided to take the 1 billion-plus photos its users had happily uploaded for free and sell them to advertisers and others. Here's the excerpt from those terms that got everyone's panties in a twist:

Some or all of the Service may be supported by advertising revenue. To help us deliver interesting paid or sponsored content or promotions, you agree that a business or other entity may pay us to display your username, likeness, photos (along with any associated metadata), and/or actions you take, in connection with paid or sponsored content or promotions, without any compensation to you. If you are under the age of eighteen (18), or under any other applicable age of majority, you represent that at least one of your parents or legal guardians has also agreed to this provision (and the use of your name, likeness, username, and/or photos (along with any associated metadata)) on your behalf.

Not only did it sound like Instagram was planning to use your pix in advertisements, it could also be using your kids' photos as well -- no notice, no compensation, no nothing.

Imagine a photo of you hoisting a cold one next to an ad for Budweiser, for example. Or one of your naked toddler alongside a spot for Pampers. You can guess what happened next.

Others were saying, not quite so rightly, that all social networks operate in the same way. It's true that for services like Facebook or Twitter to work they must have the ability to make copies of your stuff, move them from one server to another, and display them on other people's screens. Otherwise we'd all just be talking to ourselves. But only Facebook (and now, briefly, Instagram) has gone the extra mile and said it can also use your stuff in ads. Flickr, Picasa, and Photobucket don't do that.